Excise Tax

Dear Editor,

A recent article in the Evening World regarding the excise tax on medical devices contained a number of inaccurate statements. The most troubling of these is the assertion that the tax will mean the loss of jobs. The excise tax is calculated at the point of sale of the device. Where the device is made has no bearing on if the item is taxed. Further, any medical devices produced in the United States for export are not subject to the excise tax. No company is going to determine where they build new facilities based on the impact of this excise tax and if they use such illogical reasoning, their employees have much more to worry about than a small additional tax on the devices they are producing.

An industry trade group for medical device manufacturers has financed studies used to support the dire predictions of the impacts of the tax, but the findings of these studies have been found to be inaccurate by such independent publications as Bloomberg Government and the Economist magazine.

Industry trade groups exist to lobby for legislation and policies that benefit the industry. Their job is to produce and disseminate information that benefits the industry. When it was first proposed that seatbelts should be installed in all vehicles, the trade group for automotive manufacturers distributed studies that “proved” seatbelts would not save many lives and be very expensive. Another prediction from these studies was that it would eliminate jobs due to increased costs.

How long was the debate over the health impact of tobacco drug out due to “studies” by the tobacco industry that created doubt as to if smoking increased ones chance of developing cancer?

Another tax in the health care reform bill implemented in 2010 is a 10 percent tax on indoor tanning. One tanning industry trade group conducted a “study” on the impact if this tax was implemented. Their conclusion, a loss of thousands of jobs and that 1,000 tanning salons would close. A recent survey by Northwestern University of owners of tanning salons showed that the overwhelming majority has not seen a drop in business, despite a slow economy.

The loss of jobs is the first and easiest scare tactic used by industries to avoid taxes. It is too bad we have business and political leaders willing to use this tactic to try to influence us. It is important that we elect officials who understand the problems we face, as we can’t expect those who don’t understand the problems or are guided by ideology to embrace policies that will benefit our country and us.